The signing of the European Union-Vietnam Free Trade Agreement (EVFTA) was a strong and positive sign in demonstrating Vietnam’s policy of supporting free trade, said Ousmane Dione, World Bank Country Director for Vietnam.

The EU is currently one of the biggest markets of Vietnam's aquatic products

The inking of the deal was extremely important, especially at the moment when more and more people in the world are looking at protectionism, Dione told the Vietnam News Agency (VNA).

"Every agreement comes with both opportunities and challenges and the question here is how Vietnam can grasp these opportunities," Dione said, emphasising that the agreement can help Vietnam diversify trade partners and Vietnamese products can reach different markets, generating revenue and bringing more wealth to Vietnam.

However, Dione said it would also come with a number of standards which Vietnamese products have to meet and this would provide a golden opportunity for Vietnam and enterprises to take bold actions to mordernise and improve national standards to be competitive.

At present, Vietnam has an abundant and “golden-age” labour force who have knowledge and are adaptable but they are also ageing very quickly. The EVFTA could be a catalyst for Vietnam to accelerate further to build human capacity and modernise different production systems to be able to compete and become an export leader in some specific sectors, he said.

To do that, the Vietnamese Government should have reforms targeting small- and medium-sized enterprises (SMEs) and build the link between specific areas such as foreign invested companies and domestic private enterprises in order to level them up, Dione suggested.

The Government of Vietnam should give more incentives to help SMEs acquire knowledge, adopt new technology and get support from FDI enterprises, he added.